CITIC SEC 2025 Global Aluminum Enterprises: Emphasis on China's Advantaged Industries and Focus on Emerging Regional Opportunities.

CITIC SEC released a research report stating that by 2025, the growth rate of global primary aluminum production will slow down, with both increase planning and decrease risks advancing together. Aluminum enterprises in India, China, and the Middle East region lead in profitability, maintaining their industry advantage. The focus is on valuation, dividends, growth, and resources as the four main industry themes, with Chinese enterprises still worthy of attention as a competitive industry. At the same time, Indian and Middle Eastern companies also have clear advantages. The investment opportunities in the aluminum sector continue to be promising, and it is recommended to pay attention to emerging regional industry advantages. The main points of CITIC SEC are as follows: The growth rate of global primary aluminum production is slowing down, with both increase planning and decrease risks advancing. According to company announcements, by 2025, major listed aluminum enterprises in China and overseas will produce 22.92 million tons and 21.25 million tons of primary aluminum respectively, representing a year-on-year growth of 3.9% and 1.3%. According to the bank and Bloomberg forecasts, from 2025 to 2028, the growth rates of production in China and overseas will be 2.9% and 1.8% respectively, indicating a slowdown. Against the backdrop of high aluminum prices, overseas aluminum companies announced multiple increased capacity projects in 2025, with a total planned capacity exceeding 6 million tons/year, but most projects are expected to start production in 2028-2030. Meanwhile, the shutdown of Mozal and the sale of Hawesville have been completed, with the risks of power supply and the AIDC squeezing effect on power supply gradually becoming evident. These two major trends will determine the long-term situation of the industry. Aluminum enterprises in China, India, and the Middle East continue to lead in profitability and valuation advantages. In terms of profitability, the average cost of primary aluminum per unit of major aluminum enterprises globally is expected to increase by 2.1% in 2025, while the selling price is expected to increase by 8.1%, resulting in a year-on-year increase of 4.8 and 0.2 percentage points in EBITDA profit margins for primary aluminum business and overall enterprises, respectively. Aluminum enterprises in China, India, and the Middle East have shown leading profitability growth, maintaining their advantage. In terms of valuation, as of June 4, the EV/EBITDA valuations predicted by Wind and Bloomberg for Indonesian and Chinese aluminum enterprises in 2026 are 4.6/4.9X, lower than the global average of 5.6X. In terms of dividends, according to Bloomberg, the dividend yields of Indian, Chinese, and Middle Eastern aluminum enterprises in 2025 reached leading levels of 4.6%, 3.5%, and 3.0%, respectively. In terms of growth, based on the bank's and Bloomberg's consistent forecasts, from 2025 to 2028, the average production growth rates of aluminum enterprises in China, Indonesia, Europe & North America, and India are projected to be 8.4%, 6.7%, and 5.6%, exhibiting the most significant growth potential. It is recommended to pay attention to leading Chinese aluminum enterprises. Chinese aluminum enterprises still show significant advantages in terms of valuation, dividends, and growth. As of June 4, 2026, the average valuation of major listed companies in the Chinese aluminum sector has fallen to a historical low of 6-8x PE, with some targets achieving outstanding dividend yields of 8%. As a competitive industry in China, the long-term investment value of Chinese aluminum enterprises is worth focusing on. Indian and Middle Eastern companies also have advantages. Indian and Middle Eastern aluminum enterprises possess valuation, growth, and resource advantages. Risks: Risks include slower-than-expected growth in primary aluminum demand, unexpected delays in the construction and production of primary aluminum projects, unexpected delays in the construction and production of alumina projects, rising global energy costs, disruptions in mineral supply exceeding expectations, rising prices of raw materials, and escalating global trade disputes.